Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
After showing an upside bounce from the intraday lows on Monday, Nifty witnessed a decisive upmove on Tuesday and closed the day higher by 175 points. After opening with an upside gap of 123 points, the market made an attempt to move up in the early part of the session. It later shifted into a range bound action in the middle part and closed near the highs. The opening upside gap remains unfilled.
A reasonable positive candle was formed on the daily chart with gap up opening. Nifty is now in an attempt of upside breakout of the crucial overhead resistance at 17425 as per the concept of change in polarity. This is positive indication and further upside from here could open sharp follow-through upside for the market ahead.
The positive sequence of higher tops and bottoms is confirmed and the market is currently moving up towards the formation of new higher top of the sequence. Still there is no indication of any higher top reversal as of now.
Conclusion: The short term trend of Nifty continues to be positive. A decisive move above 17450-17500 levels is likely to bring bulls back into drivers seat and that could pull Nifty towards the upside target of 18000 levels in the near term. Immediate support is placed at 17425.